Friday, April 29, 2011

Apple beats Microsoft!!!

Yes you read correctly. No apples falling from the proverbial tree in this business story. Apple has surpassed Microsoft in sales revenues and profits!

Microsoft and Apple reported revenues of $16.5B and $24.5B, and profits of $5.23B and $5.99B, respectively. Although Apple's numbers are larger than Microsoft's, the latter did have a higher profit margin. Apple's 50% more revenue over Microsoft, generated only 14.5% extra profit!

An economist might also suggest looking at the trend of revenues and profits, from the chart above, and further suggest that some basic extrapolation indicates Apple is more skybound than Microsoft and thus a better financial investment.

Another interesting item to note, if you care about investment returns, is the fact that Microsoft's stock has a lower PEI (price earnings ratio) compared to Apple's stock - 11.06% versus 16.68%. Just keep in mind this is history we are looking at. You must always look at what a company is doing NOW, and what they have for TOMORROW!